mfi0103

COMHAIRLE NAN EILEAN SIAR

FINANCE SUB-COMMITTEE

Minute of Meeting held in the Council Offices, Stornoway, on 26 March 2001 at 4.00 pm

PRESENT

Mr Roderick J Murray (Chairman)

Mr Alex A MacDonald

Mr Philip R McLean

Mr Norman A Macdonald

Mr Donald Maclean

Mr Angus Nicolson

Mrs Mary Bremner

MINUTES

Finance Sub-Committee

29

The Minute of Meeting of 20 February 2001 was approved.

Audit Working Party

30*

The Minute of Meeting of the Audit Working Party of 7 March 2001 was submitted.

It was agreed to recommend approval of the conclusions of the Working Party as detailed in the Appendix to the Minute.

REVENUE AND CAPITAL MONITORING

Revenue Expenditure 2000/01

31

The Director of Finance submitted a Report summarising the forecast outturn of Revenue Expenditure for the Comhairle's services for the year ending 31 March 2001. Areas of underspend and overspend were identified in the Report. It was noted that there was an estimated reduction in unallocated reserves at the end of the financial year from £578,000 to £86,000, largely as a result of an overspend on winter maintenance and the failure by the Comhairle's DLO/DSO to make the anticipated level of contribution to the General Fund. It was indicated that measures taken to combat Foot and Mouth Disease and to try and prevent its spread to the Western Isles could result in a further drain on resources.

It was agreed:

(1) to note the Report; and

(2) that a Report be submitted to the next meeting of the Sub-Committee setting out how the anticipated overspend on winter maintenance could be covered from within the Comhairle's revenue resources.

Housing Revenue Account: Capital Programme 2000/01: Progress Report

32*

With reference to Item 14 of the Minute of Meeting of 29 January 2001, the Director of Housing submitted a Report regarding the Housing Revenue Account Capital Expenditure Programme 2000/01. The Report detailed expenditure on the Programme and summarised details of variations within the Programme. Details of the proposed revised Housing Revenue Account Capital Programme were appended to the Report, together with the anticipated expenditure profile for the Programme.

It was agreed to recommend, for the Sub-Committee's interest, that the Housing Capital Programme 2000/01 be revised as detailed in Appendix 1 to the Report by the Director of Housing to take account of project variations.

It was agreed that the public, including the press, be excluded from the meeting during consideration of the following Item on the grounds that exempt information in terms of Schedule 7A of the Local Government (Scotland) Act 1973, as defined in Standing Order 26 (h) would be disclosed, namely, information relating to the amount of any expenditure proposed to be incurred by the Comhairle on any particular contract for the acquisition or disposal of property for the supply of goods or services.

DLO/DSO Monthly Monitoring Report 1 April 2000 to 28 February 2001

33

With reference to Item 17 of the Minute of Meeting of 29 January 2001, the Director of Finance submitted a Report summarising Income and Expenditure for each of the Comhairle's DLO/DSOs for the period 1 April 2000 to 28 February 2001, together with performance monitoring reports relating to each DLO/DSO as follows:-

(1) School Meals contract

Report by Director of Education and Leisure Services

(2) Other Catering

Report by Acting Director of Education and Leisure Services

(3) Building Cleaning Services

Report by Acting Director of Education and Leisure Services

(4) Stornoway Library Cafeteria

Report by Depute Director - Arts and Leisure Services

(5) Street Cleansing Contract

Report by Acting Director of Environmental Services

(6) Refuse Collection Contract

Report by Acting Director of Environmental Services

(7) Burial Grounds Contract

Report by Acting Director of Environmental Services

(8) Technical Services DSO

Report by Director of Technical Services

It was agreed:

(1) to note the Report: and

(2) that the Director of Technical Services submit a Report to the next meeting of the Sub-Committee detailing an action plan to safeguard the position of the Technical Services DSO.

LOCAL TAXATION

Local Taxation Billing Collection and Recovery

34*

With reference to Item 19 of the Minute of Meeting of 29 January 2001, the Director of Finance submitted a Progress Report inviting Members of the current state of collection and recovery of Council Tax, Non-Domestic Rates and Community Charge for the period ended 28 February 2001. It was stated, that as a result of industrial action taken by IT staff it had not been possible to implement software upgrades which required to be installed before annual billing for the 2001/02 financial year could be carried out. It was noted that Council Tax bills for 2001/02 would be issued during the last week of April. In view of this, the instalment dates for those paying direct debit or payroll deductions would remain the same as in previous years. It was proposed that for all other Council Tax payers, for 2001/02 only, instalments be paid as follows:-

· first instalment by 15 May 2001

· nine instalments by 1^st of each month from 1 June 2001 to 1 February 2002.

It was agreed:

(1) to note the Report; and

(2) to recommend that Council Tax instalments for 2001/02 for Council Tax payers not paying by direct debit or payroll deduction be as follows:

(a) first instalment by 15 May 2001; and

(b) nine instalment by 1^st of each subsequent month from 1 June 2001 to 1 February 2002.

Rural Rate Relief Scheme

35*

With reference to Item 13 of the Minute of Meeting of 31 January 2000, the Director of Finance submitted a Report regarding the Rural Rate Relief Scheme. A summary of the operation of the scheme was set out in the Report.

It was agreed to recommend that the discretionary Rate Relief Scheme for properties in rural areas be operated as follows:

(1) grant 50% discretionary relief in respect of properties which qualify for mandatory relief;

(2) grant 100% discretionary relief on properties which do not qualify for mandatory relief only because there is more than one shop in the rural settlement;

(3) grant 100% discretionary relief in respect of petrol filling stations and "lifeline" businesses such as pharmacies; and

(4) grant 100% discretionary relief in respect of schools and associated premises; libraries; museums; refuse dumps; public conveniences; piers, harbours and associated waiting rooms and car parks; community halls and meeting rooms; community workshops; Council Offices and associated stores.

Arising out of consideration of this Item, it was further agreed that a Report be submitted to a future meeting of the Sub-Committee reviewing the policy for granting rate relief to charitable organisations with a view to ensuring that relief would be available only to those organisations whose membership was open to all.

Recommendations for Write-Off on Certain Sundry and Non-Domestic Rates

36*

The Director of Finance submitted a Report recommending that certain debts in excess of £1,000 be written off in the current financial year under the terms of the Comhairle's Financial Regulations.

It was agreed to recommend that the Director of Finance be authorised to write-off the debts detailed in the Appendix to his Report.

TREASURY MANAGEMENT

Treasury Policy Statement

37*

The Director of Finance submitted a Report regarding the policy statement setting out the Comhairle's approach to all Treasury operations. It was stated that the Comhairle had adopted a revised Code of Practice on Treasury Management in Local Authorities published by the Chartered Institute of Public Finance and Accountancy (CIPFA). It was stated that there were no changes to the policy statement which had been approved on 18 April 2000.

It was agreed to recommend that the Treasury Policy Statement approved in April 2000 be continued for the 2001/02 financial year.

Treasury Management Strategy

38*

The Director of Finance submitted a Report outlining the borrowing and investment strategy and policies to be adopted in 2001/02. The Report outlined the legislative framework and Code of Practice requirements to adopt a Treasury Management strategy and set out Treasury Management objectives, outlined the current position, reviewed the prospects for interest rates and, in the light of these forecasts, considered strategy options for the financial year 2001/02.

It was agreed to recommend that:

(1) the Treasury Management objectives set out in paragraph 4.1 of the Report by the Director of Finance be approved;

(2) the total variable rate funds borrowed do not exceed 40% of the Loans Pool Debt;

(3) the existing policy permitting borrowing in anticipation of requirement outlined in paragraph 9.5 of the Report be continued;

(4) the institutions to which the Director of Finance may lend be those set out in Appendix A to the Report;

(5) the maximum that may be lent to any approved institution be £5 million unless it is a Building Society on the approved list other than the top three in which case the maximum would be £1 million; and

(6) the time limit for investing in credit rated institutions be 364 days and 6 months for an approved building society whose credit rating is not in the top three.

CIPFA Statement on the Role of the Finance Director

49*

The Director of Finance submitted a Report regarding directives issued by the Chartered Institute of Public Finance and Accounting (CIPFA) concerning the role of the Finance Director in Local Government. The main roles and positional influence of the Finance Director as contained in the CIPFA Statement were summarised in the Report.

It was agreed to recommend that the Comhairle adopt the CIPFA Statement on the role of the Finance Director in Local Government.

Internal Audit: Future of Service Delivery

40*

The Director of Finance submitted a Report regarding the provision of an internal audit service within the Comhairle together with an assessment of the effect of this on the current internal audit arrangements. It was noted that the internal audit service had developed over recent years. Pricewaterhouse Coopers had been engaged initially to oversee the operation of internal audit but also to undertake some of the professional, technical and specialist aspects of the function. The partnership with Pricewaterhouse Coopers has given recognised strengths and independence to the Internal Audit Service. It was indicated that Pricewaterhouse Coopers currently supported the Comhairle with specialist professional input in areas such as computer auditing, value added tax, income tax, investigations and quality reviews. It was proposed to continue the current contract with Pricewaterhouse Coopers for a further two years to maximise the future effect of the service.

It was agreed to recommend that the Director of Finance be authorised to extend the contract with Messrs Pricewaterhouse Coopers for Internal Audit Services for a period of three years commencing on 1 April 2001 with separate quotations for any specialist audit work requested by the Audit Working Party.

SPECIFIC ISSUES

Stornoway Town Hall: External Fabric

41*

The Director of Technical Services submitted a Report regarding remedial work to the external fabric of the Stornoway Town Hall and outlined proposals for internal upgrading and redecoration. A summary of the works proposed, categorised as urgent, necessary and desirable, was set out in the Report. It was noted that the estimated cost of the full range of works was £595,000 and that grant assistance could be available from Historic Scotland.

It was agreed to remit the matter for full consideration to the Town Hall Member/Officer Working Group with a view to a Report from the Member/Officer Working Group be submitted to the Policy and Resources Committee at its meeting on 24 April 2001.

Western Isles Licensing Board: Legal Expenses

42*

The Director of Corporate Services submitted a Report indicating that the Western Isles Licensing Board had incurred costs in preparing for and defending a Petition for Judicial Review of the Board's decision to reject two regular extensions of permitted hours made by the proprietor of the Doune Braes Hotel, Carloway. It was indicated that the Judicial Review had led to the Licensing Board being instructed to reconvene and reconsider the application. It was stated that, in addition to the Licensing Board's own expenses to defend the Petition, it was likely that the Petitioner's costs would be awarded against the Licensing Board. The total legal expenses of the Judicial Review were estimated to amount to between £15,000 and £26,000. It was indicated that the issue had been discussed with the Acting Chief Executive who had advised that the Comhairle would bear the expenses incurred in defending the Judicial Review from the Contingency Fund.

It was agreed to note the likely call on the Contingency 2000/01 and for 2001/02 in respect of the costs of defending the recent appeal against a decision of the Western Isles Licensing Board.

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PRESENT	Mr Roderick J Murray (Chairman)
	Mr Alex A MacDonald	Mr Philip R McLean
	Mr Norman A Macdonald	Mr Donald Maclean
	Mr Angus Nicolson	Mrs Mary Bremner


			MINUTES
Finance Sub-Committee	29		The Minute of Meeting of 20 February 2001 was approved.
Audit Working Party	30*		The Minute of Meeting of the Audit Working Party of 7 March 2001 was submitted. It was agreed to recommend approval of the conclusions of the Working Party as detailed in the Appendix to the Minute.
			REVENUE AND CAPITAL MONITORING
Revenue Expenditure 2000/01	31		The Director of Finance submitted a Report summarising the forecast outturn of Revenue Expenditure for the Comhairle's services for the year ending 31 March 2001. Areas of underspend and overspend were identified in the Report. It was noted that there was an estimated reduction in unallocated reserves at the end of the financial year from £578,000 to £86,000, largely as a result of an overspend on winter maintenance and the failure by the Comhairle's DLO/DSO to make the anticipated level of contribution to the General Fund. It was indicated that measures taken to combat Foot and Mouth Disease and to try and prevent its spread to the Western Isles could result in a further drain on resources. It was agreed: (1) to note the Report; and (2) that a Report be submitted to the next meeting of the Sub-Committee setting out how the anticipated overspend on winter maintenance could be covered from within the Comhairle's revenue resources.
Housing Revenue Account: Capital Programme 2000/01: Progress Report	32*		With reference to Item 14 of the Minute of Meeting of 29 January 2001, the Director of Housing submitted a Report regarding the Housing Revenue Account Capital Expenditure Programme 2000/01. The Report detailed expenditure on the Programme and summarised details of variations within the Programme. Details of the proposed revised Housing Revenue Account Capital Programme were appended to the Report, together with the anticipated expenditure profile for the Programme.
			It was agreed to recommend, for the Sub-Committee's interest, that the Housing Capital Programme 2000/01 be revised as detailed in Appendix 1 to the Report by the Director of Housing to take account of project variations.
			It was agreed that the public, including the press, be excluded from the meeting during consideration of the following Item on the grounds that exempt information in terms of Schedule 7A of the Local Government (Scotland) Act 1973, as defined in Standing Order 26 (h) would be disclosed, namely, information relating to the amount of any expenditure proposed to be incurred by the Comhairle on any particular contract for the acquisition or disposal of property for the supply of goods or services.
DLO/DSO Monthly Monitoring Report 1 April 2000 to 28 February 2001	33		With reference to Item 17 of the Minute of Meeting of 29 January 2001, the Director of Finance submitted a Report summarising Income and Expenditure for each of the Comhairle's DLO/DSOs for the period 1 April 2000 to 28 February 2001, together with performance monitoring reports relating to each DLO/DSO as follows:- (1) School Meals contract Report by Director of Education and Leisure Services (2) Other Catering Report by Acting Director of Education and Leisure Services (3) Building Cleaning Services Report by Acting Director of Education and Leisure Services (4) Stornoway Library Cafeteria Report by Depute Director - Arts and Leisure Services (5) Street Cleansing Contract Report by Acting Director of Environmental Services
			(6) Refuse Collection Contract Report by Acting Director of Environmental Services (7) Burial Grounds Contract Report by Acting Director of Environmental Services (8) Technical Services DSO Report by Director of Technical Services
			It was agreed: (1) to note the Report: and (2) that the Director of Technical Services submit a Report to the next meeting of the Sub-Committee detailing an action plan to safeguard the position of the Technical Services DSO.
			LOCAL TAXATION
Local Taxation Billing Collection and Recovery	34*		With reference to Item 19 of the Minute of Meeting of 29 January 2001, the Director of Finance submitted a Progress Report inviting Members of the current state of collection and recovery of Council Tax, Non-Domestic Rates and Community Charge for the period ended 28 February 2001. It was stated, that as a result of industrial action taken by IT staff it had not been possible to implement software upgrades which required to be installed before annual billing for the 2001/02 financial year could be carried out. It was noted that Council Tax bills for 2001/02 would be issued during the last week of April. In view of this, the instalment dates for those paying direct debit or payroll deductions would remain the same as in previous years. It was proposed that for all other Council Tax payers, for 2001/02 only, instalments be paid as follows:- · first instalment by 15 May 2001 · nine instalments by 1^st of each month from 1 June 2001 to 1 February 2002.
			It was agreed: (1) to note the Report; and (2) to recommend that Council Tax instalments for 2001/02 for Council Tax payers not paying by direct debit or payroll deduction be as follows: (a) first instalment by 15 May 2001; and (b) nine instalment by 1^st of each subsequent month from 1 June 2001 to 1 February 2002.

Rural Rate Relief Scheme		35*	With reference to Item 13 of the Minute of Meeting of 31 January 2000, the Director of Finance submitted a Report regarding the Rural Rate Relief Scheme. A summary of the operation of the scheme was set out in the Report. It was agreed to recommend that the discretionary Rate Relief Scheme for properties in rural areas be operated as follows: (1) grant 50% discretionary relief in respect of properties which qualify for mandatory relief; (2) grant 100% discretionary relief on properties which do not qualify for mandatory relief only because there is more than one shop in the rural settlement; (3) grant 100% discretionary relief in respect of petrol filling stations and "lifeline" businesses such as pharmacies; and (4) grant 100% discretionary relief in respect of schools and associated premises; libraries; museums; refuse dumps; public conveniences; piers, harbours and associated waiting rooms and car parks; community halls and meeting rooms; community workshops; Council Offices and associated stores.
			Arising out of consideration of this Item, it was further agreed that a Report be submitted to a future meeting of the Sub-Committee reviewing the policy for granting rate relief to charitable organisations with a view to ensuring that relief would be available only to those organisations whose membership was open to all.
Recommendations for Write-Off on Certain Sundry and Non-Domestic Rates		36*	The Director of Finance submitted a Report recommending that certain debts in excess of £1,000 be written off in the current financial year under the terms of the Comhairle's Financial Regulations. It was agreed to recommend that the Director of Finance be authorised to write-off the debts detailed in the Appendix to his Report.
			TREASURY MANAGEMENT
Treasury Policy Statement		37*	The Director of Finance submitted a Report regarding the policy statement setting out the Comhairle's approach to all Treasury operations. It was stated that the Comhairle had adopted a revised Code of Practice on Treasury Management in Local Authorities published by the Chartered Institute of Public Finance and Accountancy (CIPFA). It was stated that there were no changes to the policy statement which had been approved on 18 April 2000. It was agreed to recommend that the Treasury Policy Statement approved in April 2000 be continued for the 2001/02 financial year.
Treasury Management Strategy		38*	The Director of Finance submitted a Report outlining the borrowing and investment strategy and policies to be adopted in 2001/02. The Report outlined the legislative framework and Code of Practice requirements to adopt a Treasury Management strategy and set out Treasury Management objectives, outlined the current position, reviewed the prospects for interest rates and, in the light of these forecasts, considered strategy options for the financial year 2001/02.
			It was agreed to recommend that:
			(1) the Treasury Management objectives set out in paragraph 4.1 of the Report by the Director of Finance be approved; (2) the total variable rate funds borrowed do not exceed 40% of the Loans Pool Debt; (3) the existing policy permitting borrowing in anticipation of requirement outlined in paragraph 9.5 of the Report be continued;
			(4) the institutions to which the Director of Finance may lend be those set out in Appendix A to the Report; (5) the maximum that may be lent to any approved institution be £5 million unless it is a Building Society on the approved list other than the top three in which case the maximum would be £1 million; and
			(6) the time limit for investing in credit rated institutions be 364 days and 6 months for an approved building society whose credit rating is not in the top three.
CIPFA Statement on the Role of the Finance Director		49*	The Director of Finance submitted a Report regarding directives issued by the Chartered Institute of Public Finance and Accounting (CIPFA) concerning the role of the Finance Director in Local Government. The main roles and positional influence of the Finance Director as contained in the CIPFA Statement were summarised in the Report.
			It was agreed to recommend that the Comhairle adopt the CIPFA Statement on the role of the Finance Director in Local Government.
Internal Audit: Future of Service Delivery		40*	The Director of Finance submitted a Report regarding the provision of an internal audit service within the Comhairle together with an assessment of the effect of this on the current internal audit arrangements. It was noted that the internal audit service had developed over recent years. Pricewaterhouse Coopers had been engaged initially to oversee the operation of internal audit but also to undertake some of the professional, technical and specialist aspects of the function. The partnership with Pricewaterhouse Coopers has given recognised strengths and independence to the Internal Audit Service. It was indicated that Pricewaterhouse Coopers currently supported the Comhairle with specialist professional input in areas such as computer auditing, value added tax, income tax, investigations and quality reviews. It was proposed to continue the current contract with Pricewaterhouse Coopers for a further two years to maximise the future effect of the service.
			It was agreed to recommend that the Director of Finance be authorised to extend the contract with Messrs Pricewaterhouse Coopers for Internal Audit Services for a period of three years commencing on 1 April 2001 with separate quotations for any specialist audit work requested by the Audit Working Party.
			SPECIFIC ISSUES
Stornoway Town Hall: External Fabric		41*	The Director of Technical Services submitted a Report regarding remedial work to the external fabric of the Stornoway Town Hall and outlined proposals for internal upgrading and redecoration. A summary of the works proposed, categorised as urgent, necessary and desirable, was set out in the Report. It was noted that the estimated cost of the full range of works was £595,000 and that grant assistance could be available from Historic Scotland.
			It was agreed to remit the matter for full consideration to the Town Hall Member/Officer Working Group with a view to a Report from the Member/Officer Working Group be submitted to the Policy and Resources Committee at its meeting on 24 April 2001.
Western Isles Licensing Board: Legal Expenses		42*	The Director of Corporate Services submitted a Report indicating that the Western Isles Licensing Board had incurred costs in preparing for and defending a Petition for Judicial Review of the Board's decision to reject two regular extensions of permitted hours made by the proprietor of the Doune Braes Hotel, Carloway. It was indicated that the Judicial Review had led to the Licensing Board being instructed to reconvene and reconsider the application. It was stated that, in addition to the Licensing Board's own expenses to defend the Petition, it was likely that the Petitioner's costs would be awarded against the Licensing Board. The total legal expenses of the Judicial Review were estimated to amount to between £15,000 and £26,000. It was indicated that the issue had been discussed with the Acting Chief Executive who had advised that the Comhairle would bear the expenses incurred in defending the Judicial Review from the Contingency Fund.
			It was agreed to note the likely call on the Contingency 2000/01 and for 2001/02 in respect of the costs of defending the recent appeal against a decision of the Western Isles Licensing Board.
___